Earlier this year we were engaged to find a senior executive for a leading healthcare organization which would likely involve relocation. Relos have somewhat declined in our practice post-economic meltdown, largely due to the upside-down equity that many Americans have in their home values. That, in turn, forces a very geocentric talent search – starting out in the area the client is based and usually expanding state-wide, then regionally and eventually nationally. We’ve certainly done a number of relos in the past few years and employers, while interested in having a broad slate of candidates to choose from, still seem to be stuck in the fall of 2008 – afraid to make the relocation investment to find the perfect candidate.
I was asked earlier in the year to conduct a national search, but to make sure the candidate understood that the client was offering a relocation-lite. Less filling – got it! So exactly what does that mean? To some it’s a U-Haul and a Chick-Filet sandwich, while others put a cap on actual expenses incurred for moving expenses only. Both send a very clear message to the new recruit about the value they’re place on them – leaving the new hire to deal with the massive losses they’ll likely incur trying to unload the old address while hoping they’ll see upside on their new home. It’s a very delicate issue, but one that needs some careful thought and consideration to keep from sending out the wrong message.
One way to accomplish this is take a broader look at the hiring process of someone who will require relocation.
A salary adjustment (if the cost of living is higher in the new location).
At least two trips to the new location so the family can visit the area and select the right neighborhood, find a home, schools, and make sure everyone (really) loves the new town.
Hiring and paying for a professional relocation to manage the many details of the new employee’s relocation on behalf of the company.
Reimbursement expenses like packing, materials, insurance and transportation to the new location.
Temporary housing, if required (I’ve commonly seen 3-6 months).
Some financial off-set to aid the employee in selling their old home. This may include making a fixed number of mortgage payments or paying a relocation flat bonus amount in an effort to help the new employee. Most organizations no longer buy homes as the risk to far too great in this (still) declining real estate market.
Some organizations offer low interest (recoverable) loans to help with down payments or if the new employee has to show up at the closing table with a check in order to sell their underwater home.
It’s still a bit dicey out there, and employers have to be creative and compassionate when it comes to dealing with relocation issues. While the offer of the U-Haul and Chick-Filet are appreciated – Relo-lite tastes bad in so many other ways.
Originally posted on Healthcare Informatics
The days of looking for top shelf talent across the fruited plains the way we used to is over – at least for now.
Many hiring executives I talk to all understand the challenges associated with attracting candidates that require relocation and many seem to “get it”. Others…not so much. Providing a senior level HCIT executive with a relocation budget that only includes a couple of expense paid trips and reimbursement for moving their household items and 30 days interim living expenses simply won’t work in the new world of up-side-down real estate. It’s not even close and you will send a very clear message to candidates and their perceived value to your organization based on your relocation policy. Now more than ever! The world has definitely changed.
Here’s the real challenge. The demand for HCIT talent has already started and organizations that want to attract the very best and get the right people on the bus will need to evaluate their relocation assistance policy – now! Those that “get it” are already reaping the rewards of finding great people and have stepped up their relocation packages to help their new recruits off-set some of the pain and suffering they have experienced by having to sell in this down market.
I’ve seen increases in relocation packages for:
Travel to and from the new city
· Interim living expenses
· Extra dollars to off-set real estate commissions
· Larger signing bonuses candidates can use for relocation expenses
· Lump sum payments of 2-4 months of net pay to help defray costs
The days of hiring a search firm or conducting an internal search for outside senior level talent has changed for the foreseeable future and organizations that want to scale and grow by hiring the best talent available should look closely at their relocation policy and make the necessary changes to remain competitive. The strategies you will need to attract top HCIT talent should not be hindered by having an old-school relocation policy. Make positive changes today.
If not – I’m (100%) sure your competition will.
There are multiple steps in the search process and a very good search consultant should never try to skip steps or take shortcuts. In most cases it will always backfire. When a candidate is dealing with a possible relocation (especially in today’s economic environment) every stakeholder needs to know the facts – and with every detail on the table. There are NO shortcuts when it comes to evaluating and dealing with a possible relocation.
For the most part, it was a completely different world just twelve to eighteen months ago (depending on where the candidate lived) to handle an executive relocation package for a “C” level position. The base and bonus or target earnings from the cash compensation were usually fairly straightforward. Generally speaking it was also fairly easy to provide the candidate with some temporary living expenses – 3 to 6 months was standard. The house-hunting trip(s) with the spouse was generally a standard expense item and just another box to check in a candidate’s relocation. Some organizations offered more relocation perks depending on the position.
That was then …This is now.
The U.S. housing market has changed the way clients, candidates and yes – search consultants handle job offers that involve relocation. The qualification process is more important now than ever before. We use a third party company to assist us in evaluating the details for any candidate relocation. They have to work hard and peel the onion layer-by-layer to really understand the family dynamics and make sure the entire family is on board with the move. They try to understand the specific market conditions in the candidate’s neighborhood to find out what homes have sold in the past 30-90 days, average sale price, cost per square feet, average days on the market, number of homes in their neighborhood under foreclosure AND …the candidate’s expectation of the price they need to get from a prospective buyer to make the deal work. I tell candidates to do their own homework and become educated about the details on the value of their home. Use websites like www.zillow.com and do a little research on the value of your home and neighborhood. Deal with facts and data – not emotion.
In several cases during the past 6 months the ideal (the best) candidate that loved the culture, the opportunity, had great chemistry with the hiring manager and wanted to accept the new job had to withdraw due to the financial issues regarding the sale of their principle residence. That hurts!
Here are a few things to consider if you have a chance for promotion or want to consider accepting a new position that requires relocation IF you know in advance that selling your home will be difficult:
- Consider renting your home if the rental income gives you neutral to positive cash flow. Not everyone wants to be a landlord – but it may be a short term option until the housing market stabilizes.
- Sell your home on a lease purchase arrangement. Get a down payment from the buyer that you can live with and apply part of the monthly rent to the purchase price of your home. Set a deadline when the buyer must refinance the home and pay off the mortgage to get the loan out of your name. If housing prices in your market are continuing to decline – this may be too risky.
- Consider renting a small condo or apartment for 6-12 months and commute home on weekends. Many employers understand this may be the only way to get you on board and may be willing to help off-set some of your travel expenses until your family can relocate.
There is usually a way to make a relocation work if everyone involved is flexible and a little creative. The housing market will eventually stabilize – and we will hit the housing bottom soon. However… make sure you understand the facts the next time you are ready to say YES in your job search if relocation is required.